iPhone Upgrade Program: Is Apple’s Trade-In Plan Worth It?

If you’re thinking of upgrading to the new iPhone 7, the iPhone Upgrade Program may sound like a tempting offer. The Apple trade-in plan enables you to get a brand-new iPhone every year — perfect for iPhone fans who always want the latest model — and that’s just about everybody. But the iPhone Upgrade Program isn’t a great option if you’re looking for the best deal on your iPhone. And you may want to look elsewhere if you aren’t already convinced that you need a new phone each year. Ahead, we’ll take a look at the iPhone Upgrade Program, and tell you exactly what you need to know to decide whether this Apple trade-in plan is right for you.

What is the iPhone Upgrade Program?

The iPhone Upgrade Program, which Apple introduced last year, is a monthly installment program that enables you to get a new iPhone each year. You may be considering the program if you want a new iPhone this fall, or you may be refreshing your memory on the details if you signed up last year. Either way, this Apple trade-in plan is a 24-month financing program. The program spreads out the price of the phone into monthly payments, and at the end of the 24-month contract, the phone is yours. If you want a new iPhone each year, you can upgrade after making 12 payments. If you do so, then the contract resets.

As Mike Murphy reports for Quartz, enrolling in the iPhone Upgrade Program to get a new iPhone each year means that each year, you’re only paying half of the contract. (That equals about half of what it would cost you to buy the new iPhone outright). “The only downside of this logic is that for that to hold up, you essentially have to stay enrolled in the program forever,” Murphy notes. “The minute you decide you want out of Apple’s walled garden, you’ll have to pay off what’s remaining on your contract. So if you’re enrolled in the program for three years, you’ll get three iPhones, but you’ll have to keep paying for a fourth year. Hopefully the iPhone 9 is a really great device.”

Alternately, you can buy a new iPhone outright and then sell it online (through eBay or Gazelle). Murphy estimates that “if you were to buy a mid-range iPhone Plus every year and then sell it, each phone would cost you roughly $449—basically the same price as a phone each year on the iPhone Upgrade Program, just without the commitment to signing up for a rolling 24-month contract.”

What are the perks of the Apple trade-in plan?

Man visits the Apple Store | Kena Betancur/Getty Images

Only those who really want a new iPhone each year should think about the iPhone Upgrade Program. Ultimately, we’d always advise buying your phone outright and selling your old, gently-used phone to fund the purchase. Nonetheless, Michael Duran reports for Wired that the Apple trade-in plan can be a great option. You get the flexibility to switch carriers, have access to insurance and support, and get to upgrade to a new iPhone every year. Many carriers offer plans that let you upgrade frequently. But Apple requires you to pay off only 50% of your old phone before trading it in for a new one. (For most people, that will mean 12 monthly payments. However, you can make extra payments to hit the 50% mark sooner. Then, you can upgrade to a new iPhone as soon as six months in.)

The pricing is a little bit higher when you choose the iPhone Upgrade Program than if you just go with your carrier’s plan. Pricing among major carriers for iPhone payment plans ranges from $27 to $41 per month. Meanwhile, Apple’s pricing ranges from $32 to $46. All of these plans require you to trade in an iPhone that’s in good condition and good working order. That may be easier to accomplish with the iPhone Upgrade Program’s inclusion of AppleCare+. (Plus, things even out, financially speaking, if you factor in the cost of insurance on a carrier’s payment plan.)

Another big plus of the iPhone Upgrade Program is that the phone you get is unlocked. That means that you’ll be able to use it on just about any carrier, even one in a different country. Another perk of the Apple trade-in program? You won’t need to deal with your carrier when you want a new phone. You’ll just go to an Apple store, which can often result in a better customer service experience.

What are the reasons you shouldn’t use the iPhone Upgrade Program?

Customers shop at a new Apple Store | Spencer Platt/Getty Images

There are some perks to the iPhone Upgrade Program. But there are also some good reasons not to use it. First and foremost, the iPhone Upgrade Program isn’t the cheapest way to get a new iPhone. If you want the best deal, you should pay the full cost of the device. Then, when you want a new iPhone, you can sell your old one online to partially fund the purchase. With the iPhone Upgrade Program, you can keep your device after 24 payments. But if you upgrade sooner than that, you don’t get to keep the phone. You’ll continue paying for phones, without ever recouping the investment.

The iPhone Upgrade Program may come with other costs, too. Despite the inclusion of AppleCare+, you’re still responsible for maintaining your phone. And if Apple decides that you need to replace the screen or fix other damage before trading it in, you’ll have to comply and pay up. Duran notes that a cracked screen will cost $29 to fix. And damage to any other part of the phone will cost $99 to repair. Another small annoyance? You’ll have to keep track of two phone bills: one from Apple, and one from your carrier.

Need another reason to reconsider the Apple trade-in plan? The iPhone Upgrade Program is actually a loan. It requires a credit card (a debit card won’t do) and a credit check. Apple will check your credit, and you may not be eligible if your credit score is too low. Additionally, buying into the plan is assuming that you’re going to want a new iPhone each year. Some people really do want the latest and greatest. But plenty of people didn’t find Apple’s iPhone 7 announcement that exciting. (And may not have been enticed by the iPhone 6s, either.) If that sounds like you, you may want to think twice about whether you really need to pay for the privilege of getting a new iPhone each and every year.